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MORE than £3 million has been recovered by insolvency practitioners for creditor clients in two cases using a new scheme that provides funding for insolvency litigation.

The first led to a judgment of £2.2 million including costs and the second a judgment of £900,000. Peter Whalley of Buchanans, liquidator of MDA Investment Management, describes the service, run by Insolvency Management Ltd and LawAssist, as a “spectacular weapon in the insolvency practitioner’s armoury”.

He was pursuing several claims against former directors of an insolvent company and began litigation in 2002. LawAssist provided insurance coverage from the outset. The claims were for